Globo in administration amid falsification, misrepresentation issues

By Caroline Salls

Pittsburgh, Nov. 3 – Globo plc said Chad Griffin, Simon Kirkhope and Lisa Rickelton of FTI Consulting LLP were appointed as joint administrators of the company.

According to a news release, the administration appointment was made following the disclosure of matters regarding the alleged falsification of data and the misrepresentation of the company’s financial situation.

“Our focus is to undertake an immediate assessment of the group in order to evaluate any opportunities to realize value from the various businesses,” Griffin said in the release.

“We will also be looking to gain control of the books and records in order to be in a position to undertake a full investigation. These steps will be done in close consultation with the requisite regulatory bodies.”

Globo said no dividends are expected to be available for shareholders, and the joint administrators will be applying for the cancellation of the admission of the company’s shares to trading on AIM.

The company said last month that former group chief executive officer Costis Papadimitrakopoulos had brought the issues related to the falsification of data and the misrepresentation of Globo’s financial situation to the attention of the board.

The company said it subsequently reported this matter to the appropriate law enforcement agencies in the United Kingdom, Greece and Cyprus.

U.K. investigation

In addition, Globo was notified on Oct. 27 that it is under investigation by the United Kingdom’s Financial Conduct Authority.

Papadimitrakopoulos advised the company on Oct. 25 that up to Oct. 22 he had sold 42.05 million shares of Globo and pledged 10 million shares under a personal loan agreement with Lantau Holdings Ltd. Papadimitrakopoulos said the loan would default because of two consecutive days of the suspension of the company’s shares from trading.

The company said it requested additional details about these dealings.

QCM report

Globo said on Oct. 26 that its board of directors was aware of a report published by Quintessential Capital Management (QCM), and an emergency board meeting was held to discuss the allegations in the report and decide what actions would be required to resolve the matter.

At that meeting, Papadimitrakopoulos offered his resignation, as did group chief financial officer Dimitris Gryparis.

Following the meeting, a committee of the board was set up. The committee accepted the resignations of Papadimitrakopoulos and Gryparis and suspended chief operating officer Gerasimos (Makis) Bonanos pending the outcome of appropriate investigations.

Globo said the committee initiated discussions with its advisers in relation to the next steps and to ascertain the true financial position of the company.

Issuance postponed

On Oct. 21, Globo postponed a proposed issue of senior secured high-yield notes, citing market conditions.

Without the bond financing, the company said the scale of acquisitions will be smaller than previously planned, but the group will continue to explore major acquisition opportunities and related funding as appropriate.

Trading in Globo’s shares was suspended on Oct. 23 “in order to protect shareholders’ interests.”

The London-based company provides secure telecommunications technology solutions to business customers and operates in Europe, the United Kingdom, the Middle East and South East Asia.

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